When you meet somebody new, the natural thing to do is smile. When you hear good news, your likely reaction is to grin. After you’ve suffered a misfortune, you know you’re on the way to recovery when you can share a smile.

Granted, smiling can’t solve every problem, but it can make almost any situation a little better. When our house on Necker Island burned down in the middle of the night, it wasn’t long before a humorous story had everybody laughing – my wife and I were sleeping in a cabin nearby, and I ran stark naked into a cactus while rushing toward the fire! Our next step was to start planning the even more special home we would build on the ashes.

In business, a smile can often defuse a difficult situation. If you are negotiating with a tough investor or discussing issues with a customer, a smile will show that you are willing to listen and eager to help. Smiling is infectious, so your smile may have just brightened up the day for many other people too. Some business leaders take their work very seriously indeed; they think they have to be stern in order to get things done. This can create a culture of control and fear that trickles all the way down through the company, because if the boss is scary, senior managers will be scary, and so on. In this solemn environment, people will be afraid to fail – rather than trying to do new things, they’ll play it safe. If you smile, you’ll encourage your employees to be more open, communicative and innovative too.

When an entrepreneur creates a culture of openness at a new company, it can make a big difference to employees’ and customers’ enthusiasm. This is especially true in environments where stiff upper lips and reserve are common. While spending time in Russia recently, I was struck by the austere atmosphere dominant in business there. However, times are changing and entrepreneurs like Oleg Tinkov, who made his fortune selling premium beer in Russia and has now set up a credit card business, are launching companies where staff and customers can expect smiles, friendly greetings and relaxed settings. If this trend catches on, we may see more inventive business ideas coming from that part of the world.

When you enter a store, if a saleswoman smiles and asks how you are doing, you are more likely to be open to looking around, asking questions and making a purchase. At Virgin, we all know that our smiles make a difference. When you get onto a Virgin plane, it’s the smiles from our staff that make you feel good -- that touch of heartfelt service that says “We give a damn.” After Virgin Trains lost its franchise this fall, over 170,000 people signed an e-petition to the British government to keep our trains running. We received lots of tweets and messages from people who told us they wanted to support a company with such happy, helpful staff.

As I’ve mentioned in this column before, back in the `60s, our friendly approach helped us to sign the Rolling Stones to Virgin Records. We often joked around as we worked together, and so Mick Jagger and the rest of the band saw us as being like themselves, rather than just stuffy coin counters in suits and ties.

One day, when we were having dinner in London to celebrate completing the record deal, Mick Jagger and I kept grinning at each other. Quick as a flash, Bill Wyman said: “Look at you two. I wouldn’t fancy being an apple between those two sets of gnashers!”
Who would have believed that we’d still be working together five decades later – now on their amazing 50th anniversary shows. Something to do with those grins, perhaps? (Over the years I have become known as the smiley man with the beard. It could be worse!)

These days, a lot of my time is spent traveling to different countries around the world meeting people on behalf of our nonprofit foundation, Virgin Unite. Communicating can sometimes be a little challenging, but it is a truism that everyone smiles in the same language. I learned from two brilliant diplomats, the Archbishop Desmond Tutu and Jose Maria Figueres, the former president of Costa Rica, who do wonderful work for two of our Virgin Unite-incubated organizations, The Elders and the Carbon War Room. They are always smiling as they bring about change.

If you’re looking for the next big investment for your business, but don’t have much money to spend, start by looking at yourself in the mirror. A smile won’t cost you anything, and the returns to your business will start right away.